Insurance claims glossary
Learn the vocabulary, then use it to ask a more precise question about an estimate or policy.
These are general learning definitions and original application prompts, not replacements for the definitions in your policy or state law.
Actual cash value (ACV)
A valuation basis that commonly accounts for depreciation; the exact calculation depends on the policy and applicable law.
Put it to work: Compare an ACV figure with the replacement-cost figure and ask which depreciation assumptions explain the difference.
Replacement cost value (RCV)
A repair or replacement valuation without the ordinary deduction for depreciation, subject to the contract’s terms.
Put it to work: A replacement-cost estimate is not necessarily the amount of the first check.
Depreciation
A reduction in value associated with factors such as age and condition.
Put it to work: Document the component’s age and condition separately; do not assume every component has the same useful life.
Recoverable depreciation
Depreciation that may become payable after the policy’s replacement-cost conditions are satisfied.
Put it to work: Identify the required repair evidence and applicable deadline before assuming the withheld amount will be released.
Deductible
The portion of a covered loss allocated to the insured under the policy.
Put it to work: Check whether the deductible is a fixed amount or a percentage and identify the applicable coverage.
Coverage limit
The maximum amount a particular coverage may pay, subject to its terms and other applicable limits.
Put it to work: A $30,000 estimate does not establish that $30,000 of coverage is available.
Endorsement
A document that changes the insurance contract.
Put it to work: Read endorsements with the base form; an older policy summary may omit a material change.
Exclusion
Policy wording that removes specified events, property or circumstances from coverage, subject to any exceptions.
Put it to work: Ask for the actual wording and factual basis instead of relying on a paraphrase.
Peril
A cause of loss, such as fire or wind.
Put it to work: Describe the observed condition separately from your conclusion about the cause.
Appraisal provision
Contract language establishing a process for certain loss-valuation disagreements.
Put it to work: Identify the disagreement, read the provision and check state law before deciding whether appraisal is appropriate.
Scope of loss
The documented components and work proposed to address damage.
Put it to work: Scope answers what work is included; price answers what the included work costs.
Quantity
The measured amount of an estimate item, expressed in a stated unit.
Put it to work: A 12-by-15-foot ceiling is 180 square feet before any expressly stated adjustments.
Unit price
The cost assigned to one unit of a defined estimate operation.
Put it to work: Compare what each unit includes before treating different prices as equivalent.
Roofing square
A roofing-area unit equal to 100 square feet.
Put it to work: 2,400 square feet equals 24 squares before a separately justified material allowance.
Supplement
Additional claim information or an estimate revision submitted after an earlier estimate.
Put it to work: Show what changed, why it changed and which new evidence supports the revision.
Evidence index
A list connecting exhibits with their locations, dates, sources and relevant issues.
Put it to work: Exhibit R-04 should lead the reader to a specific photograph or measurement, not an entire unorganized folder.
Estimate reconciliation
A comparison that isolates differences in scope, quantity, price and included operations.
Put it to work: Resolve identical items first and keep the unresolved differences visible.
Claim chronology
A dated record of material events and communications.
Put it to work: Distinguish the date of an inspection from the date an estimate was received.
Reference and practice
Background references: NAIC glossary, understanding policy terms, and ACV and replacement-cost coverage. Our workflow terms and prompts are original teaching material.